YOUR HOME

YOUR HOME; Avoiding Buyer's Remorse

By ANDREE BROOKS

Published: May 8, 1994

THE fuel bill for the spacious house you just bought suggested the sellers were paying only $1,500 a year to heat the place -- part of its energy-efficient appeal. What was not mentioned on the listing sheet was that the sellers regularly traveled abroad in the winter, which you learn from neighbors only after you move in.

The street you selected seemed like a quiet backwater on the Sunday afternoon you looked at the house. Only after living there for a few days do you discover that it serves as a short-cut to the highway on weekdays.

The brochure describing the new development assures you that your children will grow up "in the healthy, fresh country air of this ideal wooded community." You learn too late that it's only a few yards from a former landfill that was once used as a dump for toxic wastes.

From the minor to the catastrophic, buyers are appalled when they find out, too late, that there's something very wrong about the property or the neighborhood -- a condition known as "buyer's remorse." It happens most often because the newcomers fail to ask the right questions or carry out the appropriate investigations early on, relying too heavily on the professionals from whom they seek counsel and assistance.

And too often the drawbacks involve issues independent of the property itself. As a result there's a limit to the inquiries that will be carried out by even the most diligent lawyers, home inspectors and sales agents -- although the law is casting an ever wider net concerning how much sellers and their agents must research and reveal.

And that net may be creating a false sense of security. For example, the landfill case, Strawn v. Canuso, has created an uproar among the real estate brokerage community in New Jersey. It happened in Voorhees Township. In an appellate court decision just a few weeks ago the builder and selling brokers were held accountable since evidence was produced suggesting they knowingly concealed knowledge of the nearby landfill. Even so, the judges acknowledged that the courts had found no previous decision in New Jersey imposing a duty to disclose off-site hazards. The case is being further appealed.

And agents admit they're loath to give out certain types of off-site information for fear of being accused of discrimination or racial steering. "We need guidelines," said Arthur Greenbaum, general counsel to the New Jersey Association of Realtors.

Moreover, "it's hard to judge what might bother a buyer," said AnneBettie Herren, a sales agent with Prudential Connecticut Realty in Wilton, Conn. "So I tell my people, 'Go out there and find someone who's walking a dog. Talk to them. Come back at different times of day.' "

For families worried whether there will be suitable playmates for their own children, she even recommends that they stop by when the school bus arrives in the afternoon to meet parents and get a feel for the kids that climb off.

All sorts of other disappointments and dilemmas fall within this murky area of accountability and thus may never be raised. Arthur Weinstein, a real estate lawyer on the Upper West Side of Manhattan, recalled a recent incident where a couple purchased an apartment and were then subjected to shouting and other noisy behavior by their downstairs neighbors night after night.

Had they asked around the building before making their decision, he said, they would have learned that the family immediately below was the bane of everyone's existence.

The most careless buyers, he said, are those who pay all cash. Without the need to answer the myriad of questions lenders ask prior to granting a mortgage they often overlook key issues.

In co-ops, he said, all-cash buyers do not worry about the percentage of investor-owned units. But they should worry because it may be difficult to find a buyer when they have to sell since lenders may not give mortgages in a building with a large number of investor-owned units.

In the suburbs, he said, he has heard of all-cash buyers disregarding the need for a well-water inspection, not bothering to consult a flood-plain map, failing to find out in advance if they can be adequately insured, overlooking a radon test and failing to find out crucial details about a commercial building or meadow adjoining the property.

Indeed, Allen Susser, a partner with the law firm of Cohn Lifland Pearlman Herrmann & Knopf in Saddle Brook, N.J, recalls a client who signed a contract on a house next to a small commercial building that seemed innocuous enough. Only later did the buyer discover it was an animal testing laboratory that generated "horrible odors" in hot weather.

What, therefore, should a prospective buyer do?

* Drive or walk around the neighborhood or sit in the lobby a while and chat with residents.

Sellers should be asked about preferences for heating and cooling and tolerance for neighborly noise. Questions should be raised with the municipality about cleared sites or open spaces nearby.

"I've heard hundreds of angry people tell me later, 'I didn't move out of Manhattan to live next to a high-rise,' " said Herbert M. Balin, a partner with the law firm of Certilman Balin Adler & Hyman in East Meadow, L.I, and a zoning specialist.

In many instances, he said, the prospective buyer could have gained the answer by simply calling the zoning or planning board and providing officials with the address of the open parcels in question.

Anyone buying a home in New York City has access to a service called the Property Risk Report from Bold Property Information Service Inc., of Manhattan.

It's not cheap. But for $195 ($95 during periodic sales) it provides a customized 85-page report, culled from various public records, covering all manner of potential drawbacks within 1,000 feet or so of the property.

Categories include proposed changes such as a new building that might block a view; nuisances like a late-night disco; health hazards such as factory fumes and crime statistics and facts about the building on file with with various city agencies.

"I didn't realize how much crime there would be at the subway stops on Central Park West because it was such an expensive neighborhood," said Robin Phillips.

She and her husband, Roger Sadowsky, are negotiating to buy an apartment in the West 80's and recently bought a copy of the report.